SMS and location data marketing – good news and bad news for marketers

It’s that draft Communications Data Protection Directive again and this time it’s m-commerce marketing methods under the regulators’ spotlight.

Who: Council of EU telecoms ministers

Where: Brussels

When: December 2001

What happened:

Like it or not, the Communications Data Protection Directive, once it is signed off, will be one of the most important pieces of EU legislation ever for marketers. Elsewhere on marketinglaw we report on its provisions affecting commercial e-mail and cookies. Here we focus on the clauses dealing with commercial mobile phone messaging and marketing use of “location data”. The latter allows marketers to send SMS promoting the nearest Burger King or French Connection store to where the mobile user is standing. The problem with this “killer app.” has been that under a previous Telecommunications Directive, location data can only be used for marketing purposes by the telecoms service provider servicing the mobile in question. What’s more, or rather less, the telecoms provider can only use the location data to market telecoms services. Clearly this rule is being breached wholesale at present and there were loud calls for a relaxation if the law was not to fall into disrepute. One of the missions of this new proposed Communications Data Protection Directive is to effect that relaxation, and this has survived telecoms ministers’ scrutiny.

"Opt-out" for marketing use of location data is now the suggestion, provided, before the use is made, the user is informed of the type of location data which will be used, how long it will be used for and for what purpose. Also, the only third parties allowed to use the data will be those authorised by the telecoms provider. If authorised third party use is the plan, and it is intended that the telecoms provider will be sharing the location data with, for example, the retailer who will be sending SMS about nearby outlets, this must be stated. Users/subscribers must also be given, on a continuous basis and every time they connect to the network, the opportunity to opt out, at any time, of this use being made of their data.

On SMS non-location specific marketing, the current proposal is stricter. This is that it may take place only with prior consent, in other words “opt-in.”

Why this matters:

It has to be said that SMS marketing opt-in is the legal position here in the UK today, without the need for further directives. At least that’s the opinion of our Information Commission. And insofar as commercial SMS uses automated calling systems, this would seem to be right. Other existing regulations dictate that marketing using automated calling systems can occur only with prior consent ("opt-in"). The location data proposal, however, is a significant loosening of the present straight-jacket and will be welcomed by marketers across the EU if it remains in the final Directive next year.